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Item 7. Management’s Discussion and Analysis

2026-03-30 compared with 2025-03-27 · 451 added, 407 removed, 31 unchanged (97% of the section changed)

Management’s discussion and analysis of financial condition and results of operations

read the following discussion and analysis in conjunction with the information set forth under our consolidated financial statements

and the notes to those financial statements included elsewhere in this 2024 10-K Report.

This discussion contains forward-looking statements

based upon current expectations that involve risks and uncertainties.

See “Statement Regarding Forward-Looking Information.”

Our actual results may differ materially from those contained in or implied by any forward-looking statements as a result of various

factors, including, but not limited to, the risks and uncertainties described under “Risk Factors” elsewhere in this 2024

Certain amounts

in the Management’s discussion and analysis of financial condition and results of operations may not add due to rounding, and all

percentages have been calculated using unrounded amounts.

TherapeuticsMD

was previously a women’s healthcare company with a mission of creating and commercializing innovative products to support the

lifespan of women from pregnancy prevention through menopause.

In December 2022, we changed our business to become a pharmaceutical

royalty company, currently receiving royalties on products licensed to pharmaceutical organizations that possess commercial

capabilities in relevant territories.

On December 30, 2022 (the “Closing Date”), we completed a transaction (the

“Mayne Transaction”) with Mayne Pharma LLC, a Delaware limited liability company (“Mayne Pharma”) and

subsidiary of Mayne Pharma Group Limited, an Australian public company (“Mayne Pharma Group”), in which we and our subsidiaries (i) granted Mayne Pharma

an exclusive license to commercialize our IMVEXXY, BIJUVA and prescription prenatal vitamin products sold under the BocaGreenMD and

vitaMedMD brands (collectively, the “Licensed Products”) in the United States and its possessions and territories, (ii)

assigned to Mayne Pharma our exclusive license to commercialize ANNOVERA® (together with the Licensed Products, collectively,

the “Products”) in the United States and its possessions and territories, and (iii) sold certain other assets to Mayne

Pharma in connection therewith.

Agreement, dated December 4, 2022, between TherapeuticsMD and Mayne Pharma (the “Mayne License Agreement”), we granted Mayne

Pharma, on the Closing Date, (i) an exclusive, sublicensable, perpetual, irrevocable license to research, develop, register, manufacture,

have manufactured, market, sell, use, and commercialize the Licensed Products in the United States and its possessions and territories

and (ii) an exclusive, sublicensable, perpetual, irrevocable license to manufacture, have manufactured, import and have imported the

Licensed Products outside the United States for commercialization in the United States and its possessions and territories.

Mayne License Agreement, Mayne Pharma will pay us one-time milestone payments of each of (i) $5.0 million if aggregate net sales of all

Products in the United States during a calendar year reach $100.0 million, (ii) $10.0 million if aggregate net sales of all Products

in the United States during a calendar year reach $200.0 million and (iii) $15.0 million if aggregate net sales of all Products in the

United States during a calendar year reach $300.0 million.

Further, Mayne Pharma will pay us royalties on net sales of all Products in

the United States at a royalty rate of 8.0% on the first $80.0 million in annual net sales and 7.5% on annual net sales above $80.0 million,

subject to certain adjustments, for a period of 20 years following the Closing Date.

The royalty rate will decrease to 2.0% on a Product-by-Product

basis upon the earlier to occur of (i) the expiration or revocation of the last patent covering a Product and (ii) a generic version

of a Product launching in the United States.

Mayne Pharma will pay us minimum annual royalties of $3.0 million per year for 12 years,

adjusted for inflation at an annual rate of 3%, subject to certain further adjustments, including as described below.

Upon the expiry

of the 20-year royalty term, the licenses granted to Mayne Pharma under the Mayne License Agreement will become a fully paid-up and royalty

free license for the Licensed Products.

Transaction Agreement, dated December 4, 2022, between TherapeuticsMD and Mayne Pharma (the “Transaction Agreement”), we

sold to Mayne Pharma, at closing, certain assets for Mayne Pharma to commercialize the Products in the United States, including, with

the Population Council’s consent, our exclusive license from the Population Council to commercialize ANNOVERA (the “Transferred

consideration from Mayne Pharma to TherapeuticsMD for the purchase of the Transferred Assets under the Transaction Agreement and the

grant of the licenses under the Mayne License Agreement was (i) a cash payment of $140.0 million at closing, (ii) a cash payment of approximately

$12.1 million at closing for the acquisition of net working capital as determined in accordance with the Transaction Agreement and subject

to certain adjustments, (iii) a cash payment of approximately $1.0 million at closing for prepaid royalties in connection with the Mayne

License Agreement Amendment (as defined below) and (iv) the right to receive the contingent consideration set forth in the Mayne License

Agreement, as amended.

The acquisition of net working capital was determined in accordance with the Transaction Agreement and included

significant estimates which could change materially for a period of up to two years following the Closing Date.

On the Closing

Date, TherapeuticsMD and Mayne Pharma entered into Amendment No.

1 to the Mayne License Agreement (the “Mayne License Agreement

Pursuant to the Mayne License Agreement Amendment, Mayne Pharma agreed to pay us approximately $1.0 million in prepaid

royalties on the Closing Date.

The prepaid royalties reduced the first four quarterly payments that would have otherwise been payable

pursuant to the Mayne License Agreement by an amount equal to $257 thousand per quarterly royalty payment plus interest calculated at

19% per annum accruing from the Closing Date until the date such quarterly royalty payment was paid to us.

We and Mayne Pharma settled

the $1.5 million of consideration due to Mayne for the assumed obligations under a long-term services agreement, including our minimum

payment obligations thereunder.

As the parties agreed, during the second quarter of 2023, Mayne Parma held back our royalty payment of

$0.6 million and we funded an additional $0.9 million in August 2023 to settle the original $1.5 million payable.

the transformation that included the Mayne License Agreement, all results associated with former commercial operations have been reflected

as discontinued operations in our consolidated financial statements.

Assets and liabilities associated with the commercial business are

classified as assets and liabilities of discontinued operations in our consolidated balance sheets.

Additional disclosures regarding

discontinued operations are provided in Note 2 of our consolidated financial statements.

also has license agreements with strategic partners to commercialize IMVEXXY and BIJUVA outside of the U.S.

In July 2018, we entered into the “Knight License Agreement” with Knight pursuant to which we granted Knight an exclusive license to commercialize IMVEXXY and BIJUVA in Canada and Israel.

Management’s discussion and analysis of financial

condition and results of operations

You should read the following discussion and analysis in conjunction

with the information set forth under our consolidated financial statements and the notes to those financial statements included elsewhere

in this 2025 10-K Report.

This discussion contains forward-looking statements based upon current expectations that involve risks and

uncertainties.

See “Statement Regarding Forward-Looking Information.” Our actual results may differ materially from those

contained in or implied by any forward-looking statements as a result of various factors, including, but not limited to, the risks and

uncertainties described under “Risk Factors” elsewhere in this 2025 10-K Report.

Certain amounts in the Management’s discussion and analysis

of financial condition and results of operations may not add due to rounding, and all percentages have been calculated using unrounded

Business overview

TherapeuticsMD was previously a women’s healthcare company with

a mission of creating and commercializing innovative products to support the lifespan of women from pregnancy prevention through menopause.

In December 2022, we changed our business to become a pharmaceutical royalty company, currently receiving royalties on products licensed

to pharmaceutical organizations that possess commercial capabilities in relevant territories.

On December 30, 2022 (the “Closing

Date”), we completed a transaction (the “Mayne Transaction”) with Mayne Pharma LLC, a Delaware limited liability company

(“Mayne Pharma”) and subsidiary of Mayne Pharma Group Limited, an Australian public company (“Mayne Pharma Group”),

in which we and our subsidiaries (i) granted Mayne Pharma an exclusive license to commercialize our IMVEXXY, BIJUVA and prescription

prenatal vitamin products sold under the BocaGreenMD and vitaMedMD brands (collectively, the “Licensed Products”) in the

United States and its possessions and territories, (ii) assigned to Mayne Pharma our exclusive license to commercialize ANNOVERA®

(together with the Licensed Products, collectively, the “Products”) in the United States and its possessions and territories,

and (iii) sold certain other assets to Mayne Pharma in connection therewith.

In a License Agreement, dated December 4, 2022, between TherapeuticsMD

and Mayne Pharma (the “Mayne License Agreement”), we granted Mayne Pharma, on the Closing Date, (i) an exclusive, sublicensable,

perpetual, irrevocable license to research, develop, register, manufacture, have manufactured, market, sell, use, and commercialize the

Licensed Products in the United States and its possessions and territories and (ii) an exclusive, sublicensable, perpetual, irrevocable

license to manufacture, have manufactured, import and have imported the Licensed Products outside the United States for commercialization

in the United States and its possessions and territories.

Under the Mayne License Agreement, Mayne Pharma agreed to pay us one-time

milestone payments of each of (i) $5.0 million if aggregate net sales of all Products in the United States during a calendar year reach

$100.0 million, (ii) $10.0 million if aggregate net sales of all Products in the United States during a calendar year reach $200.0 million

and (iii) $15.0 million if aggregate net sales of all Products in the United States during a calendar year reach $300.0 million.

Mayne Pharma agreed to pay us royalties on net sales of all Products in the United States at a royalty rate of 8.0% on the first $80.0

million in annual net sales and 7.5% on annual net sales above $80.0 million, subject to certain adjustments, for a period of 20 years

following the Closing Date.

The royalty rate will decrease to 2.0% on a Product-by-Product basis upon the earlier to occur of (i) the

expiration or revocation of the last patent covering a Product and (ii) a generic version of a Product launching in the United States.

Mayne Pharma agreed to pay us minimum annual royalties of $3.0 million per year for 12 years, adjusted for inflation at an annual rate

of 3%, subject to certain further adjustments, including as described below.

Upon the expiry of the 20-year royalty term, the licenses

granted to Mayne Pharma under the Mayne License Agreement will become a fully paid-up and royalty free license for the Licensed Products.

Under the Transaction Agreement, dated December 4, 2022, between TherapeuticsMD

and Mayne Pharma (the “Transaction Agreement”), we sold to Mayne Pharma, at closing, certain assets for Mayne Pharma to commercialize

the Products in the United States, including, with the Population Council’s consent, our exclusive license from the Population

Council to commercialize ANNOVERA (the “Transferred Assets”).

The total consideration from Mayne Pharma to TherapeuticsMD for the

purchase of the Transferred Assets under the Transaction Agreement and the grant of the licenses under the Mayne License Agreement was

(i) a cash payment of $140.0 million at closing, (ii) a cash payment of approximately $12.1 million at closing for the acquisition of

net working capital as determined in accordance with the Transaction Agreement and subject to certain adjustments, (iii) a cash payment

of approximately $1.0 million at closing for prepaid royalties in connection with the Mayne License Agreement Amendment (as defined below)

and (iv) the right to receive the contingent consideration set forth in the Mayne License Agreement, as amended.

The acquisition of net

working capital was determined in accordance with the Transaction Agreement and included significant estimates which could change materially

for a period of up to two years following the Closing Date.

On the Closing Date, TherapeuticsMD and Mayne Pharma entered into Amendment

1 to the Mayne License Agreement (the “Mayne License Agreement Amendment”).

Pursuant to the Mayne License Agreement Amendment,

Mayne Pharma agreed to pay us approximately $1.0 million in prepaid royalties on the Closing Date.

The prepaid royalties reduced the first

four quarterly payments that would have otherwise been payable pursuant to the Mayne License Agreement by an amount equal to $257 thousand

per quarterly royalty payment plus interest calculated at 19% per annum accruing from the Closing Date until the date such quarterly royalty

payment was paid to us.

We and Mayne Pharma settled the $1.5 million of consideration due to Mayne for the assumed obligations under a

long-term services agreement, including our minimum payment obligations thereunder.

As the parties agreed, during the second quarter of

2023, Mayne Pharma held back our royalty payment of $0.6 million and we funded an additional $0.9 million in August 2023 to settle the

original $1.5 million payable.

As part of the transformation that included the Mayne License Agreement,

all results associated with former commercial operations have been reflected as discontinued operations in our consolidated financial

Assets and liabilities associated with the commercial business are classified as assets and liabilities of discontinued operations

in our consolidated balance sheets.

Additional disclosures regarding discontinued operations are provided in Note 2 of our consolidated

financial statements.

The Company also has license agreements with strategic partners to

commercialize IMVEXXY and BIJUVA outside of the U.S.

In July 2018, we entered into the “Knight License

Agreement” with Knight pursuant to which we granted Knight an exclusive license to commercialize IMVEXXY and BIJUVA in Canada

Knight obtained regulatory approval for IMVEXXY and BIJUVA and began commercialization efforts in 2024.

In June 2019, we entered into the “Theramex License Agreement” with Theramex to commercialize IMVEXXY and BIJUVA outside of the U.S., excluding Canada and Israel.

In 2021, Theramex secured regulatory approval for BIJUVA in certain European countries and began commercialization efforts in those countries.

In December 2024, we transferred the right to commercialize IMVEXXY and BIJUVA in Israel from Knight to Theramex.

In June 2019, we entered into the “Theramex License

Agreement” with Theramex to commercialize IMVEXXY and BIJUVA outside of the U.S., excluding Canada and Israel.

In 2021, Theramex

secured regulatory approval for BIJUVA in certain European countries and began commercialization efforts in those countries.

In December 2024, we transferred the right to commercialize

IMVEXXY and BIJUVA in Israel from Knight to Theramex.

As of December 31, 2025, we employed one full-time employee primarily

engaged in an executive position.

We have engaged external consultants who support our relationship with current partners and assist with

certain financial, IT, legal, and regulatory matters and the continued wind-down of our historical business operations.

On August 15,

2023, we entered into a master services agreement with JZ Advisory Group, pursuant to which Joseph Ziegler serves as our Principal Financial

and Accounting Officer.

of our licensed products

2022, we changed our business to become a pharmaceutical royalty company, currently receiving royalties on products licensed to pharmaceutical

organizations that possess commercial capabilities in the relevant territories.

On December 30, 2022, we granted an exclusive license

to commercialize IMVEXXY, BIJUVA, and prescription prenatal vitamin products sold under the BocaGreenMD and vitaMedMD brands and assigning

our exclusive license to commercialize ANNOVERA to Mayne Pharma.

(estradiol vaginal inserts), 4-μg and 10-μg

This pharmaceutical

product is for the treatment of moderate-to-severe dyspareunia (vaginal pain associated with sexual activity), a symptom of vulvar and

vaginal atrophy due to menopause.

As part of the FDA’s approval of IMVEXXY, we committed to conduct a post-approval observational

study to evaluate the risk of endometrial cancer in post-menopausal women with a uterus who use a low-dose vaginal estrogen unopposed

by a progestogen.

30, 2022, we granted an exclusive license to commercialize IMVEXXY in the United States and its possessions and territories to Mayne

We also have entered into licensing agreements with third parties to market and sell IMVEXXY outside of the U.S.

We entered into

the Knight License Agreement, with Knight pursuant to which, we granted Knight an exclusive license to commercialize IMVEXXY in Canada

We entered into the Theramex License Agreement with Theramex pursuant to which we granted Theramex an exclusive license to

commercialize IMVEXXY for human use outside of the U.S., except for Canada and Israel.

In December 2024, we transferred the right to

commercialize IMVEXXY in Israel from Knight to Theramex.

also asked the sponsors of other vaginal estrogen products to participate in the observational study.

In connection with the observational

study, we would have been required to provide progress reports to the FDA on an annual basis.

The obligation to conduct this study was

transferred to Mayne Pharma as part of the Mayne License Agreement.

(estradiol and progesterone) capsules, 1 mg/100 mg

This pharmaceutical

product is the first and only FDA approved bioidentical hormone therapy combination of estradiol and progesterone in a single, oral capsule

for the treatment of moderate-to-severe vasomotor symptoms (commonly known as hot flashes or flushes) due to menopause in women with

On December 30,

2022, we granted an exclusive license to commercialize BIJUVA in the United States and its possessions and territories to Mayne Pharma.

We also have entered into the Knight License Agreement with Knight pursuant to which we granted Knight an exclusive license to commercialize

BIJUVA in Canada and Israel.

We have entered into the Theramex License Agreement with Theramex pursuant to which we granted Theramex

an exclusive license to commercialize BIJUVA for human use outside of the U.S., except for Canada and Israel.

In December 2024, we transferred

the right to commercialize BIJUVA in Israel from Knight to Theramex.

(segesterone acetate (“SA”) and ethinyl estradiol (“EE”) vaginal system)

This pharmaceutical

product is a one-year ring-shaped contraceptive vaginal system (“CVS”) and the first and only patient-controlled, procedure-free,

reversible prescription contraceptive that can prevent pregnancy for up to a total of 13 cycles (one year).

30, 2022, we assigned our exclusive license to commercialize ANNOVERA in the United States and its possessions and territories to Mayne

vitamin products

On December 30,

2022, we granted an exclusive license to commercialize, in the United States and its possessions and territories, our prescription prenatal

vitamin product lines under our vitaMedMD brand name and authorized generic formulations of some of our prescription prenatal vitamin

products under our BocaGreenMD Prenatal name to Mayne Pharma.

of operations

the transformation that included the Mayne License Agreement, all results associated with former commercial operations have been reflected

as discontinued operations in the Company’s consolidated financial statements for all periods prior to the Closing Date.

and liabilities associated with the commercial business are classified as assets and liabilities of discontinued operations in the Company’s

consolidated balance sheets.

Additional disclosures regarding discontinued operations are provided in Note 2 to the consolidated financial

statements included in this 2024 10-K Report.

The following

table sets forth the results of our operations (in thousands):

ended December 31,

We have engaged external consultants who support our relationship with current partners and assist

with certain financial, IT, legal, and regulatory matters and the continued wind-down of our historical business operations.

15, 2023, we entered into a master services agreement with JZ Advisory Group, pursuant to which Joseph Ziegler serves as our Principal

Financial and Accounting Officer.

Portfolio of our licensed products

In December 2022, we changed our business to become a pharmaceutical

royalty company, currently receiving royalties on products licensed to pharmaceutical organizations that possess commercial capabilities

in the relevant territories.

On December 30, 2022, we granted an exclusive license to commercialize IMVEXXY, BIJUVA, and prescription

prenatal vitamin products sold under the BocaGreenMD and vitaMedMD brands and assigning our exclusive license to commercialize ANNOVERA

to Mayne Pharma.

IMVEXXY (estradiol vaginal inserts), 4-μg and 10-μg

This pharmaceutical product is for the treatment of moderate-to-severe

dyspareunia (vaginal pain associated with sexual activity), a symptom of vulvar and vaginal atrophy due to menopause.

As part of the

FDA’s approval of IMVEXXY, we committed to conduct a post-approval observational study to evaluate the risk of endometrial cancer

in post-menopausal women with a uterus who use a low-dose vaginal estrogen unopposed by a progestogen.

On December 30, 2022, we granted an exclusive license to commercialize

IMVEXXY in the United States and its possessions and territories to Mayne Pharma.

We also have entered into licensing agreements with

third parties to market and sell IMVEXXY outside of the U.S.

We entered into the Knight License Agreement, with Knight pursuant to which,

we granted Knight an exclusive license to commercialize IMVEXXY in Canada and Israel.

We entered into the Theramex License Agreement

with Theramex pursuant to which we granted Theramex an exclusive license to commercialize IMVEXXY for human use outside of the U.S.,

except for Canada and Israel.

In December 2024, we transferred the right to commercialize IMVEXXY in Israel from Knight to Theramex.

The FDA has also asked the sponsors of other vaginal estrogen products

to participate in the observational study.

In connection with the observational study, we would have been required to provide progress

reports to the FDA on an annual basis.

The obligation to conduct this study was transferred to Mayne Pharma as part of the Mayne License

BIJUVA (estradiol and progesterone) capsules, 1 mg/100 mg

This pharmaceutical product is the first and only FDA approved bioidentical

hormone therapy combination of estradiol and progesterone in a single, oral capsule for the treatment of moderate-to-severe vasomotor

symptoms (commonly known as hot flashes or flushes) due to menopause in women with a uterus.

On December 30, 2022, we granted an exclusive license to commercialize

BIJUVA in the United States and its possessions and territories to Mayne Pharma.

We also have entered into the Knight License Agreement

with Knight pursuant to which we granted Knight an exclusive license to commercialize BIJUVA in Canada and Israel.

We have entered into

the Theramex License Agreement with Theramex pursuant to which we granted Theramex an exclusive license to commercialize BIJUVA for human

use outside of the U.S., except for Canada and Israel.

In December 2024, we transferred the right to commercialize BIJUVA in Israel from

Knight to Theramex.

ANNOVERA (segesterone acetate (“SA”) and ethinyl estradiol

(“EE”) vaginal system)

This pharmaceutical product is a one-year ring-shaped contraceptive

vaginal system (“CVS”) and the first and only patient-controlled, procedure-free, reversible prescription contraceptive that

can prevent pregnancy for up to a total of 13 cycles (one year).

On December 30, 2022, we assigned our exclusive license to commercialize

ANNOVERA in the United States and its possessions and territories to Mayne Pharma.

Prenatal vitamin products

On December 30, 2022, we granted an exclusive license to commercialize,

in the United States and its possessions and territories, our prescription prenatal vitamin product lines under our vitaMedMD brand name

and authorized generic formulations of some of our prescription prenatal vitamin products under our BocaGreenMD Prenatal name to Mayne

Results of operations

As part of the transformation that included the Mayne License Agreement,

all results associated with former commercial operations have been reflected as discontinued operations in the Company’s consolidated

financial statements for all periods prior to the Closing Date.

Assets and liabilities associated with the commercial business are classified

as assets and liabilities of discontinued operations in the Company’s consolidated balance sheets.

Additional disclosures regarding

discontinued operations are provided in Note 2 to the consolidated financial statements included in this 2025 10-K Report.

The following table sets forth the results of our operations (in thousands):

Years ended December 31,

Revenue, net:

and service revenue

general and administrative

of long-lived assets (Note 4)

& amortization

License revenue

Operating expenses:

from operations

income (expense):

Miscellaneous

from continuing operations before income taxes

for income taxes

from continuing operations

(loss) from discontinued operations, net of income taxes

As part of our transformation and the Mayne License Agreement, all results associated with former commercial operations have been

reflected as discontinued operations in the Company’s consolidated financial statements for all periods presented.

General and administrative

Write-off and impairment of patents

Depreciation & amortization

Total operating expenses

Loss from operations

Other income (expense):

Interest income, net

Sublease income

Miscellaneous income

Total other income

Loss from continuing operations before income taxes

Income tax benefit

Net loss from continuing operations

Income from discontinued operations, net of income taxes

As part of our transformation and the Mayne License

Agreement, all results associated with former commercial operations have been reflected as discontinued operations in the Company’s

consolidated financial statements for all periods presented.

We recorded $3,022 thousand in license revenue during the year ended

December 31, 2024 primarily from the Mayne License Agreement, an increase of $459 thousand, or 35.3%, compared to $1,302 thousand in license

revenue during the year ended December 31, 2023.

December 31, 2025 primarily from the Mayne License Agreement, an increase of $1,261 thousand, or 71.6%, compared to $1,761 thousand in

license revenue during the year ended December 31, 2024.

The increase is primarily attributable to changes in sales of licensed products.

Selling, general and administrative.

Selling, general and

administrative expenses for 2024 were $4,744 thousand, a decrease of $4,159 thousand, or 46.7%, compared to the $8,903 thousand we had

This decrease was due to the increased efficiencies realized year over year and continued transition from a commercial business

to a royalty-based business.

Impairment of long-lived assets .

We recognized an impairment

loss of $1,268 thousand related to abandoned patents and applications, which is classified as an impairment of long-lived assets

on the Company’s consolidated statements of operations for the twelve months ended December 31, 2024.

We did not impair any

of our long-lived assets during the year ended December 31, 2023.

General and administrative.

General and administrative

expenses for 2025 were $6,852 thousand, an increase of $756 thousand, or 12.4%, compared to $6,096 thousand for 2024.

This increase was

primarily attributable to higher bonus expense and increased investor relations costs in 2025.

Write-off and impairment of patents .

We recognized a $176 thousand

write-off for abandoned patents and application in 2025, compared to a $1,268 thousand impairment loss in 2024.

Depreciation & amortization.

Depreciation and amortization

expense for 2024 was $509 thousand, a decrease of $413 thousand, or 44.8%, compared to the $922 thousand we had for 2023.

period, this balance is entirely comprised of amortization of license rights and intangible assets.

expense for 2025 was $384 thousand, a decrease of $125 thousand, or 24.6%, compared to $509 thousand for 2024.

This balance is entirely

comprised of amortization of license rights and intangible assets.

Operating expenses.

Total operating expenses for 2025 were $7,412

thousand, a decrease of $3,304 thousand, or 33.6%, compared to the $9,825 thousand we had for 2023.

This decrease was due to the further

optimization of our business through the reduction of costs and continued transition from a commercial business to a royalty-based business.

thousand, a decrease of $461 thousand, or 5.9%, compared to $7,873 thousand for 2024.

The decrease was primarily attributable to lower

impairment charges recognized in 2025 compared to 2024, which was partially offset by higher bonus expense and increased costs related

to investor communications.

Loss from operations.

For 2024, we had a loss from operations

of $4,760 thousand, a decrease of $3,763 thousand, or 44.2%, compared to loss from operations of $8,523 thousand for 2023.

reflects the increase in sales from licensed products and the increased efficiencies realized as a royalty-based business.

For 2025, we had a loss from operations of $4,390 thousand, a decrease in

loss of $1,722 thousand, or 28.2%, compared to loss from operations of $6,112 thousand for 2024.

This change reflects the increase in

sales from licensed products and the increased efficiencies realized as a royalty-based business.

Other income.

In 2024, we had other income of $2,417 thousand,

an increase of $1,636 thousand, compared to other income of $781 thousand in 2023.

The difference is mainly due to a $1,250 thousand one-time

payment the Company received from its sublessee on its early termination on the sublease, which was recognized in the second quarter of

2024 and an increase in royalties reported as other income for intellectual property licensed by us totaling approximately $1,083 thousand

The year ended December 31, 2023 also includes $490 thousand in other income pertaining to royalty sales of ANNOVERA.

for income taxes .

For 2024, we recorded $31 thousand of income tax benefits from continuing operations.

In 2023, the Company recognized

$43 thousand of income tax benefits from continuing operations.

from continuing operations .

For 2024, we had net loss from continuing operations of $2,312 thousand, or $0.20 per basic and diluted

common share, a decrease of $5,387 thousand, compared to net loss from continuing operations of $7,699 thousand, or $0.74 per basic and

diluted common share, for 2023.

In 2025, we had other income of $3,737 thousand, a decrease of $32 thousand,

or 0.8%, compared to other income of $3,769 thousand in 2024.

The decrease was primarily attributable to the absence of rental settlement

gain and contract breakage settlements recognized in 2024, which was partially offset by the higher sublease income and increased royalty

income from Mayne Pharma in 2025.

Benefit for income taxes .

For 2025, no income tax benefits was recognized from continuing operations.

the Company recognized $31 thousand income tax benefits from continuing operations.

Net loss from continuing operations .

For 2025, we had net loss

from continuing operations of $653 thousand, or $0.06 per basic and diluted common share, a decrease in loss of $1,659 thousand, compared

to net loss from continuing operations of $2,312 thousand, or $0.20 per basic and diluted common share, for 2024.

Discontinued Operations.

For 2025, net income from discontinued

operations was $131 thousand, an increase of $2,710 thousand, compared to net loss from discontinued operations of $2,579 thousand for

For additional information, see “Note 2 – Discontinued

Operations”, in the notes to the consolidated financial statements appearing elsewhere in this 2024 10-K Report.

and capital resources

use of cash is to fund our continuing operations.

We have funded our operations primarily through revenue from licensed royalties, public

offerings of our common stock and private placements of equity and debt securities, and the transactions with Mayne Pharma.

As of December

31, 2024, we had cash and cash equivalents totaling $5,059 thousand.

We maintain cash at financial institutions that at times may exceed

the Federal Deposit Insurance Corporation insured limits of $250 thousand per bank.

We have never experienced any losses related to these

Pharma License Agreement

30, 2022, we granted Mayne Pharma (i) an exclusive, sublicensable, perpetual, irrevocable license to research, develop, register, manufacture,

have manufactured, market, sell, use, and commercialize the Licensed Products in the United States and its possessions and territories

and (ii) an exclusive, sublicensable, perpetual, irrevocable license to manufacture, have manufactured, import and have imported the

Licensed Products outside the United States for commercialization in the United States and its possessions and territories.

consideration from Mayne Pharma to us under the Mayne License Agreement consisted of (i) a cash payment of $140.0 million at closing,

(ii) a cash payment of approximately $12.1 million at closing for the acquisition of net working capital as determined in accordance

with the Transaction Agreement, and subject to certain adjustments, (iii) a cash payment of approximately $1.0 million at closing for

prepaid royalties in connection with the Mayne License Agreement Amendment and (iv) the right to receive the contingent consideration

set forth in the Mayne License Agreement, as amended.

to the Mayne License Agreement, Mayne Pharma will pay us one-time, milestone payments of each of (i) $5.0 million if aggregate net sales

of all Products in the United States during a calendar year reach $100.0 million, (ii) $10.0 million if aggregate net sales of all Products

in the United States during a calendar year reach $200.0 million and (iii) $15.0 million if aggregate net sales of all Products in the

United States during a calendar year reach $300.0 million.

Further, Mayne Pharma will pay us royalties on net sales of all Products in

the United States at a royalty rate of 8.0% on the first $80 million in annual net sales and 7.5% on annual net sales above $80.0 million,

subject to certain adjustments, for a period of 20 years following the Closing Date.

The royalty rate will decrease to 2.0% on a Product-by-Product

basis upon the earlier to occur of (i) the expiration or revocation of the last patent covering a Product and (ii) a generic version

of a Product launching in the United States.

Mayne Pharma will pay us minimum annual royalties of $3.0 million per year for 12 years,

adjusted for inflation at an annual rate of 3%, subject to certain further adjustments, including as described below.

Upon the expiry

of the 20-year royalty term, the licenses granted to Mayne Pharma under the Mayne License Agreement will become a fully paid-up and royalty

free license for the Licensed Products.

Agreement with Rubric Capital Management LP

2023, we entered into the Subscription Agreement with Rubric, pursuant to which we agreed to sell to Rubric, or one or more of its affiliates,

up to an aggregate of 5,000,000 shares of Common Stock, from time to time during the term of the Subscription Agreement in separate drawdowns

at our election, at a purchase price of the five-day volume-weighted average price of our common stock at the time of the sale of such

shares, at an aggregate purchase price of up to $5,000,000 (collectively, the “Private Placement”).

draw down occurred on June 29, 2023, consisting of a sale of 312,525 shares of Common Stock at a price per share equal to $3.6797.

received gross proceeds of $1.15 million from the drawdown, before expenses.

On November 15, 2023, Rubric drew down an additional 877,192

shares of Common Stock at a price per share equal to $2.2761.

We received gross proceeds of $2.0 million from the drawdown, before expenses.

There were no draw downs in 2024.

Concern” above for further discussion related to our ability to generate and obtain adequate amounts of cash to meet our liquidity

needs and our plans to satisfy our such needs in the short-term and in the long-term.

As a result, there is substantial doubt about our

ability to continue as a going concern for the next twelve months from the issuance of the financial statements included in this 2024 10-K Report.

The following

table reflects the major categories of cash flows from continuing operations for each of the periods (in thousands).

ended December 31,

operations was $84 thousand, a decrease of $47 thousand, compared to net income from discontinued operations of $131 thousand for 2024.

For additional information, see “Note 2.

Discontinued Operations”,

in the notes to the consolidated financial statements appearing elsewhere in this 2025 10-K Report for further details.

Liquidity and capital resources

Our primary use of cash is to fund our continuing operations.

funded our operations primarily through revenue from licensed royalties, public offerings of our common stock and private placements

of equity and debt securities, and the transactions with Mayne Pharma.

As of December 31, 2025, we had cash and cash equivalents totaling

$7,483 thousand.

We maintain cash at financial institutions that at times may exceed the Federal Deposit Insurance Corporation insured

limits of $250 thousand per bank.

We have never experienced any losses related to these funds.

Mayne Pharma License Agreement

On December 30, 2022, we granted Mayne Pharma (i) an exclusive, sublicensable,

perpetual, irrevocable license to research, develop, register, manufacture, have manufactured, market, sell, use, and commercialize the

Licensed Products in the United States and its possessions and territories and (ii) an exclusive, sublicensable, perpetual, irrevocable

license to manufacture, have manufactured, import and have imported the Licensed Products outside the United States for commercialization

in the United States and its possessions and territories.

The total consideration from Mayne Pharma to us under the Mayne License Agreement

consisted of (i) a cash payment of $140.0 million at closing, (ii) a cash payment of approximately $12.1 million at closing for the acquisition

of net working capital as determined in accordance with the Transaction Agreement, and subject to certain adjustments, (iii) a cash payment

of approximately $1.0 million at closing for prepaid royalties in connection with the Mayne License Agreement Amendment and (iv) the

right to receive the contingent consideration set forth in the Mayne License Agreement, as amended.

Pursuant to the Mayne License Agreement, Mayne Pharma has agreed to

pay us one-time, milestone payments of each of (i) $5.0 million if aggregate net sales of all Products in the United States during a calendar

year reach $100.0 million, (ii) $10.0 million if aggregate net sales of all Products in the United States during a calendar year reach

$200.0 million and (iii) $15.0 million if aggregate net sales of all Products in the United States during a calendar year reach $300.0

Further, Mayne Pharma has agreed to pay us royalties on net sales of all Products in the United States at a royalty rate of 8.0%

on the first $80 million in annual net sales and 7.5% on annual net sales above $80.0 million, subject to certain adjustments, for a period

of 20 years following the Closing Date.

The royalty rate will decrease to 2.0% on a Product-by-Product basis upon the earlier to occur

of (i) the expiration or revocation of the last patent covering a Product and (ii) a generic version of a Product launching in the United

Mayne Pharma has agreed to pay us minimum annual royalties of $3.0 million per year for 12 years, adjusted for inflation at an

annual rate of 3%, subject to certain further adjustments, including as described below.

Upon the expiry of the 20-year royalty term,

the licenses granted to Mayne Pharma under the Mayne License Agreement will become a fully paid-up and royalty free license for the Licensed

Subscription Agreement with Rubric Capital Management LP

On May 1, 2023, we entered into the Subscription Agreement with Rubric,

pursuant to which we agreed to sell to Rubric, or one or more of its affiliates, up to an aggregate of 5,000,000 shares of Common Stock,

from time to time during the term of the Subscription Agreement in separate drawdowns at our election, at a purchase price of the five-day

volume-weighted average price of our common stock at the time of the sale of such shares, at an aggregate purchase price of up to $5,000,000

(collectively, the “Private Placement”).

The initial draw-down occurred on June 29, 2023, consisting of a sale

of 312,525 shares of Common Stock at a price per share equal to $3.6797.

We received gross proceeds of $1.15 million from the drawdown,

before expenses.

On November 15, 2023, Rubric drew an additional 877,192 shares of Common Stock at a price per share equal to $2.2761.

We received gross proceeds of $2.0 million from the draw-down, before expenses.

There were no draw-downs in 2025 and 2024.

See “Going Concern” above for further discussion related

to our ability to generate and obtain adequate amounts of cash to meet our liquidity needs and our plans to satisfy our such needs in

the short-term and in the long-term.

As a result, there is substantial doubt about our ability to continue as a going concern for the

next twelve months from the issuance of the financial statements included in this 2025 10-K Report.

The following table reflects the major categories of cash flows from

continuing operations for each of the periods (in thousands).

Years ended December 31,

Cash flow from continuing operations

cash provided by (used in) operating activities

provided by financing activities

cash used in discontinued operations

increase (decrease) in cash

Activities from continuing operations.

Net cash provided by operating activities in 2024 was $1,170 thousand, an increase of $24,251

thousand, compared to net cash used in operating activities of $23,081 thousand for 2023.

This change was primarily due to a $5,387 thousand

decrease in our net loss from continuing operations combined with the pay-down of current liabilities in the prior-year period.

Activities from continuing operations.

For 2024, there was no cash received from financing activities, compared to net cash received

from financing activities of $3,151 thousand for 2023, reflecting the sale of common stock during 2023.

Net cash used in discontinued operations for 2024 was $438 thousand, a decrease of $24,622 thousand, as compared to net

cash used in discontinued operations of $25,060 thousand for 2023.

This change relates primarily to a decrease in expenses incurred and

the payment of current liabilities associated with our transition from a manufacturing and commercialization business to a royalty-based

For additional

details, see the consolidated statements of cash flows included in our consolidated financial statements in this 2024 10-K Report.

liquidity measure

Net cash provided by operating activities

Net cash used in discontinued operations

Net increase in cash

Operating Activities from continuing operations.

Net cash provided by operating activities in 2025 was $2,454 thousand, an

increase of $1,284 thousand, compared to net cash provided in operating activities of $1,170 thousand for 2024.

This increase was primarily

driven by the significant reduction in loss from continuing operations and favorable changes in accrued expenses and other current liabilities,

partially offset by lower non-cash adjustments such decreased long-lived asset impairment charges in 2025.

Financing Activities from continuing operations.

was no cash received from financing activities for both 2025 and 2024.

Net cash used in discontinued operations.

Net cash used in discontinued operations for 2025 was $30 thousand, a decrease

of $408 thousand, as compared to net cash used in discontinued operations of $438 thousand for 2024.

This change relates primarily to

a decreased level of activities associated with our discontinued operations.

For additional details, see the consolidated statements of cash flows

included in our consolidated financial statements in this 2025 10-K Report.

Other liquidity measure

Receivable from Mayne Pharma.

On December 30, 2022, Mayne Pharma

acquired our accounts receivable balance of approximately $29.3 million which is subject to certain working capital adjustments.

December 31, 2024, and 2023, we had a royalty receivable of $3,562 thousand and $3,090 thousand, respectively, relating to the short-term

portion of receivable from Mayne Pharma and $16,010 thousand and $18,484 thousand, respectively, relating to the long-term portion of

royalty receivable which includes royalties recognized from the Minimum Annual Royalty.

See “Note 1 Business, basis of presentation,

new accounting standards and summary of significant accounting policies (Revenue Recognition)” to the consolidated financial statements

included in this 2024 10-K Report.

obligations, off-balance sheet arrangements, purchase commitments and employment agreements

Our contractual

obligations and off-balance sheet arrangements are discussed below.

For additional information on any of the following and other obligations

and arrangements, see “Note 7.

Commitments and Contingencies” to the consolidated financial statements included in this 2024

On December 30, 2022, Mayne Pharma acquired our accounts receivable

balance of approximately $29.3 million which is subject to certain working capital adjustments.

As of December 31, 2025, and 2024, we

had a royalty receivable of $3,159 thousand and $3,327 thousand, respectively, relating to the short-term portion of royalty receivable

from Mayne Pharma and $13,713 thousand and $16,010 thousand, respectively relating to the long-term portion of royalty receivable which

includes royalties recognized from the Minimum Annual Royalty.

See “Note 1 Business, basis of presentation, new accounting standards

and summary of significant accounting policies (Revenue Recognition)” to the consolidated financial statements included in this

2025 10-K Report.

Contractual obligations, off-balance sheet arrangements, purchase

commitments and employment agreements

Our contractual obligations and off-balance sheet arrangements are

discussed below.

For additional information on any of the following and other obligations and arrangements, see “Note 7.

and Contingencies” to the consolidated financial statements included in this 2025 10-K Report.

In the ordinary course of business, we enter into agreements with

third parties that include indemnification provisions, which, in our judgment, are normal and customary for companies in our industry

Pursuant to these agreements, we agree to indemnify, hold harmless, and reimburse indemnified parties for losses suffered, for

which there may or may not be limitations on potential damages.

The maximum potential amount of future payments we could be required

to make under these indemnification provisions is sometimes unlimited.

As a result, the estimated fair value of liabilities relating

to these provisions is minimal.

Accordingly, we had no liabilities recorded for these provisions as of December 31, 2025.

In the normal course of business, we may be confronted with issues

or events that may result in contingent liability.

These generally relate to lawsuits, claims, environmental actions, or the actions of

various regulatory agencies.

These generally relate to lawsuits, claims, environmental actions, or the actions

of various regulatory agencies.

We consult with counsel and other appropriate experts to assess the claim.

If, in our opinion, we have incurred

a probable loss as set forth by accounting principles generally accepted in the United States of America (“U.S.

estimate is made of the loss and the appropriate accounting entries are reflected in our consolidated financial statements.

regarding commitments is in “Note 7.

Commitments and contingencies” to the consolidated financial statements included in

this 2024 10-K Report.

regarding employment agreements is in “Note 7.

Commitments and contingencies” to the consolidated financial statements included

in this 2024 10-K Report.

accounting policies and estimates

discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements included

elsewhere in this 2024 10-K Report, which has been prepared in accordance with U.S.

The preparation of these financial statements

requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and

related disclosure of contingent assets and liabilities.

On an ongoing basis, we evaluate our estimates, including those related to identifiable

intangible assets, certain accrued liabilities, and income taxes.

We base our estimates on historical experience and on other assumptions

that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying

values of assets and liabilities that are not readily apparent from other sources.

Actual results may differ from these estimates under

different assumptions or conditions.

We have identified

the areas described below as critical to our business operations and the understanding of our results of operations given the uncertainties

associated with the assumptions underlying each estimate.

For a detailed discussion on the application of these and other significant

accounting policies, see “Note 1.

Basis of presentation, new accounting standards and summary of significant accounting policies”

to the consolidated financial statements included in this 2024 10-K Report.

If, in our opinion, we have

incurred a probable loss as set forth by accounting principles generally accepted in the United States of America (“U.S.

an estimate is made of the loss and the appropriate accounting entries are reflected in our consolidated financial statements.

Information regarding commitments is in “Note 7.

and contingencies” to the consolidated financial statements included in this 2025 10-K Report.

Employment agreements

Information regarding employment agreements is in “Note 7.

and contingencies” to the consolidated financial statements included in this 2025 10-K Report.

Critical accounting policies and estimates

Management’s discussion and analysis of our financial condition

and results of operations are based upon our consolidated financial statements included elsewhere in this 2025 10-K Report, which has

been prepared in accordance with U.S.

The preparation of these financial statements requires management to make estimates and judgments

that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities.

On an ongoing basis, we evaluate our estimates, including those related to identifiable intangible assets, certain accrued liabilities,

and income taxes.

We base our estimates on historical experience and on other assumptions that are believed to be reasonable under the

circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are

not readily apparent from other sources.

Actual results may differ from these estimates under different assumptions or conditions.

We have identified the areas described below as critical to our business

operations and the understanding of our results of operations given the uncertainties associated with the assumptions underlying each

For a detailed discussion on the application of these and other significant accounting policies, see “Note 1.

presentation, new accounting standards and summary of significant accounting policies” to the consolidated financial statements

included in this 2025 10-K Report.

Discontinued Operations

Discontinued operations comprise activities that were disposed of at

5 unchanged sentences

For additional information, see “Note 2.

Discontinued Operations”, in the notes to the consolidated financial statements appearing elsewhere in this 2024 10-K Report.

Operations”, in the notes to the consolidated financial statements appearing elsewhere in this 2025 10-K Report.

contingencies – Mayne Pharma

In determining

whether an accrual for a loss contingency is required, we first assess the likelihood of occurrence of the future event or events that

will confirm the loss.

When a loss is probable (the future event or events are likely to occur) and the amount of the loss can be reasonably

estimated, the estimated loss is accrued.

If the reasonable estimate of the loss is a range and an amount within the range appears to

be a better estimate than any other amount within the range, that amount should be accrued.

However, if no amount within the range is

a better estimate, the minimum amount in the range should be accrued.

In February 2024, the Company received Mayne Pharma’s calculation

of the net working capital allowances for payer rebates and wholesale distributor fees pursuant to the Transaction Agreement, which differed

significantly from the Company’s estimate of the allowances.

The Company continues to believe its estimated allowances for payer

rebates and wholesale distributor fees are reasonable and intends to resolve this matter through the processes permitted in the Transaction

In determining whether an accrual for a loss contingency is required,

we first assess the likelihood of occurrence of the future event or events that will confirm the loss.

When a loss is probable (the future

event or events are likely to occur) and the amount of the loss can be reasonably estimated, the estimated loss is accrued.

If the reasonable

estimate of the loss is a range and an amount within the range appears to be a better estimate than any other amount within the range,

that amount should be accrued.

However, if no amount within the range is a better estimate, the minimum amount in the range should be

In February 2024, we received Mayne Pharma’s

calculation of the net working capital allowances for payer rebates and wholesale distributor fees pursuant to the Transaction Agreement,

which differed significantly from our estimate of the allowances.

We continue to believe our estimated allowances for payer rebates and

wholesale distributor fees are reasonable.

In August 2024 and in February 2025, we also received information from Mayne Pharma pertaining

to the net working capital allowance for returns that differs significantly from our estimate of the allowance.

On April 8, 2025, we filed the Mayne Lawsuit seeking

damages for breach of contract, breach of the implied covenant of good faith and fair dealing, fraudulent inducement, and unjust enrichment

related to Mayne Pharma’s actions in relation to the License Agreement and the Transaction Agreement, primarily relating to the

net working capital allowances and certain actions or inactions by Mayne Pharma relating thereto.

On June 20, 2025, we filed an amended

complaint against Mayne Pharma and on July 22, 2025, Mayne Pharma filed a motion to dismiss the Mayne Lawsuit.

On March 23, 2026, a magistrate

judge recommended that the court grant-in-part and deny-in-part Mayne Pharma’s motion to dismiss.

The magistrate judge recommended granting

Mayne’s motion to dismiss our claims for breach of the covenant of good faith and fair dealing, certain of our breach of contract

claims and our claim for fraudulent inducement, but recommended the court grant us leave to amend the fraudulent inducement claim.

magistrate judge recommended denying Mayne’s motion to dismiss our other claims.

The magistrate judge further recommended the court

stay the Mayne Lawsuit while the parties submit the net working capital claims to a dispute resolution process.

The parties have 14 days

to object to these recommendations.

On May 30, 2025, Mayne Pharma filed the Mayne Countersuit seeking damages

for breach of contract and fraudulent inducement related to the Transaction Agreement.

As part of the Mayne Countersuit, Mayne Pharma

also made certain indemnification demands under the Transaction Agreement, which we dispute.

On July 28, 2025, we filed a motion to dismiss

the fraudulent inducement claim in the Mayne Countersuit.

On March 23, 2026, a magistrate judge recommended that the court grant our motion

to dismiss Mayne Pharma’s claim for fraudulent inducement, but recommended the court deny our motion to dismiss Mayne Pharma’s

other claims.

The parties have 14 days to object to this recommendation.

As of December 31, 2025, we believed no additional accrual was

required for such claims, as we could not reasonably estimate a range of loss.

The outcome of this matter is uncertain at this point.

As a result, the Company cannot reasonably estimate a range of loss,

and accordingly, the Company has not accrued any additional liability associated with Mayne Pharma’s allowance calculation for payer

rebates and wholesale distributor fees, particularly as the Company believes the outcome of this matter to be intertwined with the resolution

of the net working capital allowance for returns.

In August 2024, the Company received information from Mayne Pharma

pertaining to the net working capital allowance for returns that differs significantly from the Company’s estimate of the allowance.

As of December 31, 2024, the Company believed no additional accrual was required for amounts that may be owed for the allowance for returns

under the Transaction Agreement.

The Company has not recorded any contingent gains or receivables for any such allowances.

continues to monitor the unresolved and pending net working capital items as changes to estimated amounts owed or amounts due from Mayne

Pharma may be material.

has also made certain indemnification demands under the Transaction Agreement, which the Company disputes.

As of December 31, 2024, the

Company believed no additional accrual was required for such claims, as the Company could not reasonably estimate a range of loss.

License arrangements

may consist of non-refundable upfront license fees, exclusive licensed rights to patented or patent pending technology, and various performance

or sales milestones and future product royalty payments.

we cannot reasonably estimate a range of loss, and accordingly, we have not accrued any additional liability associated with Mayne Pharma’s

allowance calculation for payer rebates and wholesale distributor fees, particularly as we believe the outcome of this matter to be intertwined

with the resolution of the net working capital allowance for returns.

As of December 31, 2025, we also believed no additional accrual was

required for amounts that may be owed for the allowance for returns under the Transaction Agreement.

We have not recorded any contingent

gains or receivables for any such allowances.

Management continues to monitor the unresolved and pending net working capital items as

changes to estimated amounts owed or amounts due from Mayne Pharma may be material.

License revenue

License arrangements may consist of non-refundable upfront license

fees, exclusive licensed rights to patented or patent pending technology, and various performance or sales milestones and future product

royalty payments.

Some of these arrangements may include multiple performance obligations.

Non-refundable

up-front fees that are not contingent on any future performance by us, and do not require continuing involvement on our part, are recognized

as revenue when the right to use functional intellectual property is transferred to the customer.

30, 2022, we closed a License Agreement with Mayne Pharma pursuant to which we sold to Mayne Pharma the exclusive license rights in our

product ANNOVERA and granted an exclusive license in other products, including IMVEXXY and BIJUVA.

Under the terms of the License Agreement,

we received $140 million at closing and we are eligible to receive additional payments in the aggregate of up to an additional $30 million

based on the achievement of sales milestones (collectively, the “Milestone Amounts”).

The proceeds at closing were allocated

between consideration for the sale of ANNOVERA and the initial license fee for the Licensed Products, as the sale of ANNOVERA was accounted

for under ASC 610-20, Gains and Losses from Derecognition of Nonfinancial Assets in arriving at the gain on disposal (see Note 2 to the

consolidated financial statements included in this 2024 10-K Report), while the license grant of the other products were recognized under

the provisions of ASC 606, Revenue from Contracts with Customers, as a license of functional intellectual asset.

The proceeds were allocated

among the Licensed Products on the relative net present value of forecasted future product sales from those products.

Non-refundable up-front fees that are not

contingent on any future performance by us, and do not require continuing involvement on our part, are recognized as revenue when the

right to use functional intellectual property is transferred to the customer.

On December 30, 2022, we closed a License Agreement with Mayne Pharma

pursuant to which we sold to Mayne Pharma the exclusive license rights in our product ANNOVERA and granted an exclusive license in other

products, including IMVEXXY and BIJUVA.

Under the terms of the License Agreement, we received $140 million at closing and we are eligible

to receive additional payments in the aggregate of up to an additional $30 million based on the achievement of sales milestones (collectively,

the “Milestone Amounts”).

will be recognized, as applicable, in subsequent periods based on actual product sales that exceed the respective net sales milestones

as such variable consideration is constrained by the occurrence of the subsequent sales.

revenue recognized in 2024 and 2023 primarily related to royalties provided for under the Mayne License Agreement based on Mayne Pharma’s

sales of the Licensed Products subject to that agreement.

Under the Mayne License Agreement, the Company is entitled to earn royalties

on net sales of all of the Licensed Products at a royalty rate of (i) 8% on the first $80 million of net sales of the Licensed Products

and (ii) 7.5% on net sales of all of the Licensed Products after the first $80 million of net sales.

The royalty rate is subject to a

2% reduction upon the earlier to occur of (i) the expiration or revocation of the last valid claim covering a Licensed Product, and (ii)

a generic product launch (a “LOE”).

We are entitled to minimum annual royalties beginning with the year ending December 31,

2023 ($3 million annual minimum) and continuing with 3% annual increases through the year ending December 31, 2034 (the “Minimum

Annual Royalty”).

The Minimum Annual Royalty originally totaled $42.6 million, and this total amount was allocated among the Licensed

Products on the relative net present value of forecasted future product sales from those products.

The portion allocated to consideration

for the sale of ANNOVERA was attributed towards the gain on disposal of that asset.

For the remaining portion allocated to the license

grants for the other products, we determined that the minimum guarantee underlying the Minimum Annual Royalty should be treated as fixed

consideration and recognized under ASC 606 at the point in time when the license was transferred.

Since the Minimum Annual Royalty will

be received in annual installments through 2034, we determined the transaction price allocated under ASC 606 contained a significant

financing component, and we therefore determined the initial royalty revenue and corresponding receivable based on the present value

of the allocated Minimum Annual Royalty.

The present value was calculated using a discount rate of 10.45%, based on the credit characteristics

of Mayne Pharma and the timing of future payments, and the value will be accreted to full value through the earlier of January 1, 2034

This royalty receivable is a contract asset as of December 31, 2024, and is further subject to offset by Mayne Pharma.

Royalty revenue

earned in excess of the Minimum Annual Royalty will be recognized under ASC 606, which provides revenue recognition constraints by requiring

the recognition of revenue at the later of the following:

1) when the subsequent sale occurs or 2) when the performance obligation to

which some or all of the sales-based royalty has been allocated has been satisfied (or partially satisfied).

We applied the royalty recognition

constraint required under the guidance for sales-based royalties, which requires a sales-based royalty to be recorded no sooner than

the underlying sale.

Therefore, royalties on sales of products commercialized by Mayne Pharma will be recognized in the subsequent periods

that the Licensed Products are sold.

For additional

discussion on revenue, see “I.

Revenue recognition” in Note 1.

Basis of presentation, new accounting standards and summary

of significant accounting policies to the consolidated financial statements included in this 2024 10-K Report.

accounting pronouncements

regarding accounting standards issued or effective in 2024 is included in “Note 1.

Basis of Presentation, New Accounting Standards

and Significant Accounting Policies” to the consolidated financial statements.

Quantitative and qualitative disclosures about market risk

As a “smaller

reporting company,” as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),

and pursuant to Instruction 6 to Item 201(e) of Regulation S-K, we are not required to provide this information.

The proceeds at closing were allocated between consideration for the sale of ANNOVERA and the initial

license fee for the Licensed Products, as the sale of ANNOVERA was accounted for under ASC 610-20, Gains and Losses from Derecognition

of Nonfinancial Assets in arriving at the gain on disposal (see Note 2 to the consolidated financial statements included in this 2025

10-K Report), while the license grant of the other products were recognized under the provisions of ASC 606, Revenue from Contracts with

Customers, as a license of functional intellectual asset.

The proceeds were allocated among the Licensed Products on the relative net

present value of forecasted future product sales from those products.

The Milestone Amounts will be recognized, as applicable, in subsequent

periods based on actual product sales that exceed the respective net sales milestones as such variable consideration is constrained by

the occurrence of the subsequent sales.

Our royalty revenue recognized in 2025 and 2024 primarily related

to royalties provided for under the Mayne License Agreement based on Mayne Pharma’s sales of the Licensed Products subject to that

Under the Mayne License Agreement, the Company is entitled to earn royalties on net sales of all of the Licensed Products

at a royalty rate of (i) 8% on the first $80 million of net sales of the Licensed Products and (ii) 7.5% on net sales of all of the Licensed

Products after the first $80 million of net sales.

The royalty rate is subject to a 2% reduction upon the earlier to occur of (i) the

expiration or revocation of the last valid claim covering a Licensed Product, and (ii) a generic product launch (a “LOE”).

We are entitled to minimum annual royalties beginning with the year ending December 31, 2023 ($3 million annual minimum) and continuing

with 3% annual increases through the year ending December 31, 2034 (the “Minimum Annual Royalty”).

The Minimum Annual Royalty

originally totaled $42.6 million, and this total amount was allocated among the Licensed Products on the relative net present value of

forecasted future product sales from those products.

The portion allocated to consideration for the sale of ANNOVERA was attributed towards

the gain on disposal of that asset.

For the remaining portion allocated to the license grants for the other products, we determined that

the minimum guarantee underlying the Minimum Annual Royalty should be treated as fixed consideration and recognized under ASC 606 at

the point in time when the license was transferred.

Since the Minimum Annual Royalty will be received in annual installments through

2034, we determined the transaction price allocated under ASC 606 contained a significant financing component, and we therefore determined

the initial royalty revenue and corresponding receivable based on the present value of the allocated Minimum Annual Royalty.

value was calculated using a discount rate of 10.45%, based on the credit characteristics of Mayne Pharma and the timing of future payments,

and the value will be accreted to full value through the earlier of January 1, 2034 or a LOE.

This royalty receivable is a contract asset

as of December 31, 2025, and is further subject to offset by Mayne Pharma.

Royalty revenue earned in excess of the Minimum Annual Royalty will

be recognized under ASC 606, which provides revenue recognition constraints by requiring the recognition of revenue at the later of the

1) when the subsequent sale occurs or 2) when the performance obligation to which some or all of the sales-based royalty has

been allocated has been satisfied (or partially satisfied).

We applied the royalty recognition constraint required under the guidance

for sales-based royalties, which requires a sales-based royalty to be recorded no sooner than the underlying sale.

Therefore, royalties

on sales of products commercialized by Mayne Pharma will be recognized in the subsequent periods that the Licensed Products are sold.

For additional discussion on revenue, see “I.

Revenue recognition”

Basis of presentation, new accounting standards and summary of significant accounting policies” to the consolidated

financial statements included in this 2025 10-K Report.

Recent accounting pronouncements

Information regarding accounting standards issued or effective in

2025 is included in “Note 1.

Basis of Presentation, New Accounting Standards and Significant Accounting Policies” to the

consolidated financial statements.

Quantitative and qualitative disclosures about market

As a “smaller reporting company,” as defined by Rule 12b-2

of the Exchange Act, and pursuant to Instruction 6 to Item 201(e) of Regulation S-K, we are not required to provide this information.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis